The biggest threat to a successful company can be its success. Why? When success leads to complacency (i.e. self-satisfaction often accompanied by unawareness of actual dangers or deficiencies), leaders resist change because it upsets the status quo.
They forget the stages of product life cycle and believe that stage two growth will continue by doing what they’ve been doing. They forget that “old” as in same-old-same-old means they’re not doing anything new.
Bova believes that only “what’s-next” thinking ensures continuing success. She identifies 10 growth strategies any company can employ; some are standalone while others are interrelated. Here’s a look at two of the interrelated that maximize the value of existing products:
“Customer Base Penetration” — Sell more existing products to current customers. Building within your customer base costs less than acquiring new customers. McDonald’s introduced “value menus” and “breakfast anytime” to its product offerings. These broadened the appeal to its customers. Similarly, Red Bull began offering different flavors to its customers.
You don’t have to be big: A friend owns a 7 a.m. to 3 p.m. restaurant that’s always very crowded at lunch with people from nearby commercial and industrial businesses. Knowing that these customers had limited time for lunch and couldn’t wait in line, he added delivery through Grubhub and a call-ahead, carry-out option.
Deliveries grew and evolved into a catering business, which led to “market acceleration” (i.e. expand into new markets with existing products). Bova explains how Under Armour, The Honest Company and Mattel accelerated into new markets.
On a smaller scale, a friend owns a residential carpet-cleaning franchise. He accelerated by working with high-end residential painters and home remodelers to package his service, so their customers’ homes have “new rooms.” He also works with Realtors who are preparing their clients’ homes for sale.
The Bottom Line: Growth requires doing different things and doing things differently.
